Cross-Border Mergers in the EU: Shareholders’ Derivative Suits Against Corporate Directors

Dr Georgios Zouridakis, Lecturer in Law at the University of Essex, has published a new chapter in the edited collection Cross-Border Mergers: EU Perspectives and National Experiences (Springer 2019).

Dr Zouridakis’ study shows that shareholders championing corporate interests may face several obstacles following cross-border mergers within the EU, depending on whether the suit is temporally prior to the merger or vice versa. The fact that, post-merger, the company ceases to exist (and is succeeded by another entity in another jurisdiction), gives rise to issues regarding the application of rules intrinsic to the mechanics of derivative suits and particularly those on: continuous ownership; contemporaneous ownership; costs; and on the requirement for shareholders to first demand the board to take action.    

Given that the derivative suit, in all its variations, is a form of shareholder-led representative action, provided by most European countries – and often the only such available – this chapter argues in favour of a policy facilitating such shareholders’ enforcement of corporate claims in the cross-border merger context. 

Dr Zouridakis’ chapter is included in the collection Cross-Border Mergers, which was edited by Dr. Thomas Papadopoulos and published by Springer in October 2019.

This edited volume focuses on specific, crucially important structural measures that foster corporate change, namely cross-border mergers. Such cross-border transactions play a key role in business reality, economic theory and corporate, financial and capital markets law. Since the adoption of the Cross-border Mergers Directive, these mergers have been regulated by specific legal provisions in EU member states.

This book analyses various aspects of the directive, closely examining this harmonised area of EU company law and critically evaluating cross-border mergers as a method of corporate restructuring in order to gain insights into their fundamental mechanisms. It comprehensively discusses the practicalities of EU harmonisation of cross-border mergers, linking it to corporate restructuring in general, while also taking the transposition of the directive into account.

Exploring specific angles of the Cross-border Mergers Directive in the light of European and national company law, the book is divided into three sections: the first section focuses on EU and comparative aspects of the Cross-border Mergers Directive, while the second examines the interaction of the directive with other areas of law (capital markets law, competition law, employment law, tax law, civil procedure). Lastly, the third section describes the various member states’ experiences of implementing the Cross-border Mergers Directive.

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